- Peachtree completes first Special Situations Fund I investment.
- It provides $14.5 million in preferred equity.
- Financing supports acquisition of DoubleTree Suites in Detroit.
PEACHTREE GROUP COMPLETED its first investment through Peachtree Special Situations Fund I LP. The financing supports the acquisition and repositioning of the 203-key DoubleTree Suites Detroit Downtown Fort Shelby in Detroit, which will be renovated and converted to Embassy Suites by Hilton.
The investment provides approximately $14.5 million in preferred equity as part of a total capitalization of approximately $42 million, Peachtree said in a statement. The project includes a rebranding, capital improvements and operational changes.
“This investment reflects how we’re approaching today’s market,” said Greg Friedman, Peachtree’s managing principal and CEO. “We’re seeing a meaningful opportunity set driven more by market dislocation than distress. Capital remains available, but often not in the right form or at the right level of the capital stack. By providing flexible capital solutions, we can help sponsors execute attractive business plans while maintaining a disciplined focus on downside protection and positive, risk-adjusted returns.”
Peachtree Special Situations Fund I LP has a target size of $250 million and is the firm's fourth dedicated equity fund, the statement said. The fund can invest across commercial real estate sectors but is expected to focus on hospitality.
It targets preferred, structured and common equity investments for sponsors facing liquidity constraints, refinancing gaps or equity shortfalls while offering downside protection, Peachtree said. It also invests in special situations, including REO acquisitions, deed-in-lieu transactions and discounted note purchases.
Michael Ritz, Peachtree's executive vice president for investments, said market appreciation alone can no longer drive returns.
“Today’s environment rewards investors who can identify liquidity gaps, structure capital creatively and execute business plans that create value rather than relying on a rising tide,” he said.
Atlanta-based Peachtree is led by Friedman, Principal and CFO Jatin Desai and Principal Mitul Patel. The firm's capabilities include credit, equity, development, asset management and property management.
The company recently originated $56.4 million in C-PACE financing for the recapitalization and redevelopment of The CTR, formerly the CNN Center, in downtown Atlanta. The project will redevelop the approximately 1 million-square-foot mixed-use property.
